{"id":"savings-dai-sdai","title":"Savings DAI (sDAI)","content":"**Savings DAI (sDAI)** is an [ERC-4626](https://iq.wiki/wiki/erc-4626) token that represents [DAI](https://iq.wiki/wiki/dai) deposited in the [Dai](https://iq.wiki/wiki/dai) Savings Rate (DSR) module, enabling users to earn yield from the Sky Protocol while retaining the ability to use sDAI for transfers, [staking](https://iq.wiki/wiki/staking), lending, and other [decentralized finance (DeFi)](https://iq.wiki/wiki/defi) functions. [\\[1\\]](#cite-id-XKKxJdY9hq)\n\n## Overview\n\nSavings [DAI](https://iq.wiki/wiki/dai) (sDAI) served as an earlier iteration of Savings [USDS](https://iq.wiki/wiki/usds) (sUSDS), functioning as a tokenized representation of [DAI](https://iq.wiki/wiki/dai) [stablecoins](https://iq.wiki/wiki/stablecoin) that were deposited into the [Dai](https://iq.wiki/wiki/dai) Savings Rate (DSR) within the Sky Protocol. This design allowed sDAI holders to accrue yield generated by the DSR while maintaining the flexibility to utilize the token across various [DeFi](https://iq.wiki/wiki/defi) applications. Unlike rebasing tokens, sDAI is an accumulating token, meaning its [DAI](https://iq.wiki/wiki/dai)-denominated value gradually increases over time. Each sDAI token is fungible and can be instantly redeemed for [DAI](https://iq.wiki/wiki/dai). [\\[1\\]](#cite-id-XKKxJdY9hq)\n\nThe yield for sDAI is derived directly from the [Dai](https://iq.wiki/wiki/dai) Savings Rate (DSR), a feature of the [Sky Protocol](https://iq.wiki/wiki/skymoney) that allows any [DAI](https://iq.wiki/wiki/dai) holder to earn a savings rate on their holdings. To activate this yield, users must deposit their [DAI](https://iq.wiki/wiki/dai) into the DSR smart contract. The deposited [DAI](https://iq.wiki/wiki/dai) remains unlocked and can be withdrawn instantly at any time. The DSR is funded by the [Sky Protocol's](https://iq.wiki/wiki/sky) revenue streams, which include fees from crypto-collateralized loans, investments in U.S. treasury bills, and liquidity provisioning into SparkLend and the [Spark](https://iq.wiki/wiki/spark) Liquidity Layer. [\\[1\\]](#cite-id-XKKxJdY9hq)\n\nBoth Savings [DAI](https://iq.wiki/wiki/dai) and the [Dai](https://iq.wiki/wiki/dai) Savings Rate are non-custodial and permissionless [smart contracts](https://iq.wiki/wiki/smart-contract) provided by [Sky](https://iq.wiki/wiki/skymoney), and are not issued or deployed by [Spark](https://iq.wiki/wiki/spark). [Spark](https://iq.wiki/wiki/spark) does not exert any control over the Sky Savings Rate or the sDAI token, as Sky Governance determines the DSR rate and is subject to change. [\\[1\\]](#cite-id-XKKxJdY9hq)\n\n## Yield Generation\n\nThe core functionality of sDAI revolves around its connection to the [Dai](https://iq.wiki/wiki/dai) Savings Rate (DSR). When [DAI](https://iq.wiki/wiki/dai) is deposited into the DSR contract, it begins to accrue yield, which is paid out in [DAI](https://iq.wiki/wiki/dai). The sDAI token then represents this yield-bearing [DAI](https://iq.wiki/wiki/dai). As an accumulating token, the value of sDAI in terms of [DAI](https://iq.wiki/wiki/dai) increases over time, reflecting the yield earned. This contrasts with rebasing tokens, where the token balance itself might change. [\\[1\\]](#cite-id-XKKxJdY9hq)\n\nUsers can acquire Savings Tokens, including sDAI, by depositing supported stablecoins into a Savings Vault through the [Spark](https://iq.wiki/wiki/spark) App. The [Spark](https://iq.wiki/wiki/spark) App provides a user-friendly interface for managing deposits and accessing the [Sky](https://iq.wiki/wiki/skymoney) Savings Rate, offering a transparent [Annual Percentage Yield (APY)](https://iq.wiki/wiki/annual-percentage-yield-apy) in [USDC](https://iq.wiki/wiki/usdc).  [\\[1\\]](#cite-id-XKKxJdY9hq) [\\[2\\]](#cite-id-d397aAPzRX)\n\n## Sky Protocol\n\nThe [Dai](https://iq.wiki/wiki/dai) Savings Rate (DSR) and the sDAI token are integral components of the [Sky Protocol](https://iq.wiki/wiki/skymoney). These are non-custodial and permissionless [smart contracts](https://iq.wiki/wiki/smart-contract) that are offered by [Sky](https://iq.wiki/wiki/skymoney), rather than being issued or deployed by [Spark](https://iq.wiki/wiki/spark). This distinction is crucial as [Spark](https://iq.wiki/wiki/spark) does not have any direct control over the [Sky](https://iq.wiki/wiki/skymoney) Savings Rate or the sDAI token. The governance of the Dai Savings Rate, including its yield percentage, is managed by [Sky](https://iq.wiki/wiki/skymoney) Governance. [\\[1\\]](#cite-id-XKKxJdY9hq)\n\nThe DSR's yield is generated from various revenue sources within the Sky Protocol, including fees collected from crypto-collateralized loans, returns from investments in U.S. Treasury bills, and income from providing liquidity to SparkLend and the [Spark](https://iq.wiki/wiki/spark) Liquidity Layer. This diversified revenue model contributes to the sustainability of the DSR. [\\[1\\]](#cite-id-XKKxJdY9hq)","summary":"sDAI was an ERC-4626 token representing DAI in the DSR, letting users earn yield while maintaining liquidity for DeFi transfers, staking, and lending, as an accumulating, non-rebasing asset.","images":[{"id":"QmNMFzRt7waApdMzyoXPByiSP5J5KfjdqFAWebqU1si7eu","type":"image/jpeg, image/png"}],"categories":[{"id":"cryptocurrencies","title":"cryptocurrencies"}],"tags":[{"id":"Stablecoins"},{"id":"Ethereum"},{"id":"Protocols"}],"media":[],"metadata":[{"id":"references","value":"[\n  {\n    \"id\": \"XKKxJdY9hq\",\n    \"url\": \"https://docs.spark.fi/user-guides/earning-savings/sdai\",\n    \"description\": \"Savings DAI documentation\",\n    \"timestamp\": 1753101455886\n  },\n  {\n    \"id\": \"d397aAPzRX\",\n    \"url\": \"https://app.spark.fi/\",\n    \"description\": \"Spark App statistics\",\n    \"timestamp\": 1753101455886\n  },\n  {\n    \"id\": \"48UtgZ1kEU\",\n    \"url\": \"https://www.coingecko.com/en/coins/savings-dai\",\n    \"description\": \"CoinGecko SDAI market data\",\n    \"timestamp\": 1753101455886\n  }\n]"},{"id":"website","value":"https://app.spark.fi/"},{"id":"coingecko_profile","value":"https://www.coingecko.com/en/coins/savings-dai"},{"id":"etherscan","value":"https://etherscan.io/token/0x83f20f44975d03b1b09e64809b757c47f942beea"},{"id":"optimistic-etherscan","value":"https://optimistic.etherscan.io/token/0x2218a117083f5b482b0bb821d27056ba9c04b1d3"},{"id":"base","value":"https://basescan.org/token/0x99ac4484e8a1dbd6a185380b3a811913ac884d87"},{"id":"coinmarketcap_url","value":"https://coinmarketcap.com/currencies/savings-dai/"},{"id":"previous_cid","value":"\"https://ipfs.everipedia.org/ipfs/QmXjshbWsfEYsEnD1zznrAgG6BcaxkZcoFYxT4RcJnPjH9\""},{"id":"commit-message","value":"\"Refactor: Adjust heading levels in sDAI article for improved structure.\""},{"id":"previous_cid","value":"QmXjshbWsfEYsEnD1zznrAgG6BcaxkZcoFYxT4RcJnPjH9"}],"events":[],"user":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"author":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"language":"en","version":1,"linkedWikis":{"blockchains":["ethereum","optimism","base","spark"],"founders":[],"speakers":[]}}